Managing temporary workers: work identity, diversity and operational HR choices

76 HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 15 NO 1, 2005

Managing temporary workers: work identity,diversity and operational HR choices

Bas Koene, Erasmus University, RotterdamMaarten van Riemsdijk, University of TwenteHuman Resource Management Journal, Vol 15, no 1, 2005, pages 76-92

Strategic HRM theory argues that organisations should distinguish different types ofemployees according to their value and availability. We argue that this has resulted in anunderestimation of the importance of specific HRM practices in relation to temporaryemployees. Building on theoretical work that discusses the employment relationship fortemporary employees, the process of identification with the organisation and differentways of managing diversity, we distinguish three approaches to the operationalmanagement of temporary employees. We explore two cases that reflect opposite ends ofthe scale. They illustrate the value of the theoretical framework and substantiate theclaim that, even after the strategic choice for a lean, distanced and uninvolved temporary‘employment mode’ is made, different operational HRM practices lead to differences inperformance. Contact: Bas Koene, Rotterdam School of Economics, Erasmus University,Rotterdam, Netherlands. Email: [email protected]

According to the literature on strategic HRM, it makes good business sense todistinguish different types of employees, depending on their value andavailability to the organisation. Temporary agency workers (TAWs) are usually

characterised as of relatively low value and easily replaceable (eg Atkinson, 1984; Lepakand Snell, 1999). We argue that this has resulted in an HRM rhetoric underestimatingthe importance of specific HRM attention for temporary employees. Temporary andscattered work practices result in employment relationships where identification withthe employing organisation is not self-evident (eg Sennet, 1998). Lower intensity,shorter duration of contracts and reduced visibility of the employment relationshipmay inhibit such identification (eg Dutton et al, 1994). Still, various studies have arguedits importance for organisational performance (Beer et al, 1984; Gustafson and Reger,1995; Pfeffer, 1994; Weick, 1993) and continuous operational reliability (Weick andRoberts, 1993). Dutton et al (1994) summarise a number of possible positive effects ofidentification including better in-group co-operation, competitive behaviour towards‘outside’ groups, more organisational citizenship behaviour and better individualassociation to the organisation. Indeed, recent research has indicated problems withhigh turnover, loyalty and commitment in the operational management of TAWs anddifficulties in balancing strategic costs and benefits in situations where TAWs constitutea sizeable share of the workforce (Ward et al, 2001: 15).

Building on theoretical work that discusses the employment relationship fortemporary employees (McLean Parks et al, 1998), the process of member identificationwith an organisation (Dutton et al, 1994), and strategies for managing HR diversity(Brickson, 2000; Dass and Parker, 1999), we distinguish three approaches to theoperational management of temporary employees. The subsequent case analysesillustrate this variation in operational HRM practices and temporary workforce

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Bas Koene and Maarten van Riemsdijk

77HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 15 NO 1, 2005

performance in the context of the strategic choice for a lean, distanced, uninvolvedtemporary ‘employment mode’.

MANAGING A DIFFERENTIATED WORKFORCE

The central claim of HRM theory is the unique contribution of people to organisationalimprovement and innovation and thus to performance (eg Fombrun et al, 1984; Beer etal, 1984; Pfeffer, 1994). The rise of HRM in organisations, reflected in the admittance ofthe HR manager into the inner circles of central management, has been driven byorganisational rationality arguing that extensive (‘good’) HRM can be justified byenhanced organisational (financial) performance (eg Kamoche, 1994). This strategicinterest in HRM has stimulated much research in the area, for instance on HRM andorganisational performance (eg Huselid, 1995; Arthur, 1992; Schuler and Jackson, 1987).Central to these analyses was the effort to understand best practices at theorganisational level, ranging from universal best practices (eg Pfeffer, 1994; Ulrich,1997) to advocating a contingency perspective, emphasising the need to maintain a fitbetween organisational strategy and strategic HRM (eg Arthur, 1994).

As HRM implied paying more attention to the workforce, an interest arose in itscomposition. Starting from Atkinson’s intuitively appealing distinction between coreand periphery (Atkinson, 1984; Atkinson and Meager, 1986), various researcherspointed out the need for a differentiated approach to HRM. The central argument isthat a differentiation in the content and quality of the employment relationship fordifferent types of employees reflects both the specific needs of these employees andoptimises the organisational (HR) costs and benefits (increased performance).Illustrative of this kind of reasoning is Lepak and Snell’s (1999) frameworkdistinguishing four different ‘employment modes’, linked to four different types of‘human capital’ on the basis of their value to the organisation and the uniqueness oftheir skills in the labour market. Based on this classification, HR management candecide on the optimal HR architecture for the organisation, selecting the appropriateemployment modes to manage the relationship of each ‘employee type’. Personnelwith highly valuable firm-specific skills are viewed as ‘core personnel’. Theiremployment relationship should be ‘organisation focused... encouraging significantmutual investment on the part of employers and employees in developing critical firmspecific skills’ (Lepak and Snell, 1999: 36). Contracted ‘temporary employees’, on theother hand, represent:

human capital that is generic and of limited strategic value. [It] can bepurchased easily on the open labour market and, therefore, can be treatedessentially as a commodity. Lepak and Snell, 1999: 39

This suggests that temporary employees can be used rather opportunisticallywithout serious consequences for the hiring organisation. Lepak and Snell characterisethe employment relationship for temporary personnel as transactional, whereemployees have limited association with a firm and where their psychological contract(Rousseau, 1995) focuses on short-term economic exchanges:

with the transactional relationship, firms probably do not expect (and donot obtain) organisational commitment; the relationships simply focus onthe economic nature of the contract. ...Given the transactional nature ofcontract work, HR activities might need only focus on securingcompliance with the terms and conditions of the contract versus executingbroader responsibilities and assuming organisational roles. ...to ensure

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compliance, firms likely will concentrate on enforcing rules andregulations, upholding specific provisions regarding work protocols, andensuring conformance to preset standards. Lepak and Snell, 1999: 40

This type of contract possibly reflects an effective organisational approach to themanagement of many contractual relationships where contract work is done offcompany premises or by consultants who are hired to deliver a product. However, whencontracting work is done on site, and especially when it involves agency workers whooperate under direct supervision of the organisation’s management, it may be beneficialto pay more attention to the HR management of temporary work. Typical flexiblestaffing problems are often specifically related to attitudinal issues of temporaryemployees. They include a relatively high turnover, a high dropout rate in the first fewdays of employment, high sick leave percentages, unreliability of temporary workersbecause of a high number of ‘no shows’ in shifts, low work morale and limitedresponsibility of temporary workers, and the difficulty in getting workers of ‘sufficientlevel’ at all.

MORE THAN A TRANSACTIONAL RELATIONSHIP

How important are work attitudes and behaviour for the performance of temporaryemployees? Can we expect variation in work attitudes considering the limited mutualresponsibilities laid out in the temporary employment contract? In a review of attitudesand behaviour of temporary workers, McLean Parks et al (1998) summarised possibleeffects of factors such as job insecurity, lack of control, interpersonal support andsensitivity on job satisfaction and commitment among temporary workers. They reportfindings that point out specific problems for TAWs such as identity struggles and theinherent ambiguity that results from the dual control of the temporary workers by thetemporary work agency (TWA) and the employing organisation (Ibid: 703). Theseissues lead them to conclude that temporary employees are not only motivated andbound by a rational, explicit, transactional contract with the organisation, but alsodevelop a broader, more implicit relational psychological contract that affects theirperformance. The ‘psychological contract’ (eg Rousseau, 1995) can be defined as “theidiosyncratic set of reciprocal expectations held by employees concerning theirobligations (ie what they will do for the employer) and their entitlements (ie what theyexpect to receive in return)” (McLean Parks et al, 1998: 698). Whether or not this balancebetween obligations and entitlements has been honoured or violated influences issuessuch as job satisfaction, commitment, intent to leave and organisational citizenshipbehaviour. Hence, they argue that:

it is useful to remember not to stereotype workers as unmotivated andunskilled, but instead to remember that differences in circumstances andin the manner in which different employees perceive their psychologicalcontracts need to be considered for all employees.

McLean Parks et al, 1998: 723

In their evaluation of the psychological contract for temporary employees, McLeanParks et al distinguish nine dimensions of the employment relationship that influencepsychological contract formation and subsequently affect employee attitudes andbehaviour (Ibid: 725) – see Table 1.

Four dimensions are especially relevant for psychological contract formation oftemporary employees: the duration of the employment relationship; the specificity ofthis duration; the type of contribution of the temporary employee in the organisation –

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whether it was substitutable (universalistic), unique (particularistic) or whether theemployee simultaneously fulfils obligations to two employers (multiple agency); and,finally, the extent to which workers felt that they had other options when they chosetheir present temporary contract (volition).

McLean Parks et al subsequently distinguished various types of temporaryemployment relationships with that of the classical temporary factory workerreflecting employment “on a very limited basis, with little chance of being hired aslong-term employees” where “workers possess universal skills that are easilyreplaceable” and “the terms of the contract are static and tangible” (Ibid: 715). Thepsychological contract for such workers is also summarised in Table 1, presenting anemployment relationship with very limited mutual obligations and purelyeconomically motivated. In such a relationship, people expect little, get even less andare not likely to give anything in return.

An evaluation of the possibilities that might affect temporary employees' workattitudes, and get them to engage in the work they are doing, requires an analysis oftheir manoeuvrability on the nine factors mentioned above – evaluating the possibilityof moving their perception of their employment relationship from the purelytransactional to one with more mutual responsibilities and a more pervasive taskconception that also encompasses more subjective task elements.

Stability Degree to which the psychological contract is limited in terms of(static/dynamic) its ability to evolve and change without an implied renegotiation

of the termsScope Extent to which the boundary between one’s employment(narrow/pervasive) relationship and other aspects of one’s life is seen as permeableTangibility Degree to which the employee perceives the terms of the contract (observable/ as unambiguously defined and explicitly specified, and clearlysubjective) observable to third partiesFocus Relative emphasis of the psychological contract on (not socio-emotional/ socio-emotional versus economic concernssocio-emotional)Timeframe: duration Extent to which the employee perceives the relationship to be(short timeframe/ short or long termlong timeframe)Time frame: precision Extent to which the employee perceives the duration of the(precise duration/ relationship to be finite (defined) or infinite (undefined)imprecise duration)Particularism Degree to which the employee perceives the resources exchanged(universal/ within the contract as unique and non-substitutableparticularistic)Multiple agency Exists when an act by an employee simultaneously fulfils(yes/no) obligations to two or more entities, with full knowledge and

sanction from bothVolition Degree to which employees believe they have choice in the(involuntary/ selection of the nature of the employment relationship, including voluntary) (but not limited to) the degree to which they had input or control

into the terms of the contract or formation of the deal

Source: McLean Parks et al, 1998

TABLE 1 Dimensions governing the perceived temporary employment relationship

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TEMPORARY EMPLOYEES AND WORK IDENTITY

Given the different ways in which an employee can perceive his/her employmentrelationship with an organisation, it helps to understand the processes that influencean employee’s perceptual attachment to the organisation. The process of identificationwith the organisation is a useful way to do so. An ‘identification perspective’ fortemporary employees presents two interesting questions. First, what are the drivers ofthe process of organisational identification and how are they affected by the temporaryemployment relationship? Secondly, what are the various ways in which a temporaryemployee and an organisation can handle the fact that temporary employees aredifferent?

The process of identification with the organisation

Dutton et al (1994) present a clear model describing the process of identification withthe organisation. In their model, the attractiveness of the perceived organisationalidentity is central to identification. This attractiveness is influenced by six factors. First,the organisation needs to offer an organisational identity. Organisational socialisationdetermines the salience of the organisation’s identity and through this influences thequality and richness of the employee’s perception of it. Three factors detail theindividual’s assessment of the attractiveness and indicate to what degree the perceivedorganisational identity is capable of supporting an employee’s self-concept.Consistency of the perceived organisational identity with an individual’s self-conceptsupports his/her wish to maintain continuity in his/her self-concept (self-continuity).A better fit leads to stronger identification with the organisation. When social identitiesin the organisation provide a sense of distinctiveness, when they help the individual tostand out in the crowd in a positive way (self-distinctiveness) or when theorganisational identity enhances an individual’s self-esteem (self-enhancement), theattractiveness of the organisational identity to the individual will also be enhanced.Two final factors influence the attractiveness of the perceived organisational identity:intensity and duration of contact with the employing organisation. Both increase anindividual’s sense of connectedness and subsequently lead to increased attractivenessof the organisational identity. Dutton et al furthermore argue that visibility of theaffiliation to the organisation amplifies the influence of attractiveness on organisationalidentification. Visibility reminds people of their organisational membership, and itcreates expectations about behaviour and attitudes.

Considering these seven determinants of identification (ie six factors influencingattractiveness of the perceived organisational identity, and visibility amplifying theinfluence of attractiveness on identification), careless management of temporaryemployees may have a number of undesirable consequences. Weak socialisation leadsto unexpected and relatively superficial perceptions of the organisation’s identity. Thismay hinder the process leading to a positive assessment of organisational identity.Furthermore, superficial, purely transactional contracting inhibits organisationalidentification, because it provides less ‘self-relevant’ information useful from theperspective of self-continuity. It provides no interesting, distinctive factors (other thanperhaps a sense of ‘cool disinterest’ appreciated in some circles) to support thedistinctiveness of an individual’s social identity. The limitation of mutualresponsibilities emphasises the lack of value of the individual employee to theorganisation, leaving little room for building self-esteem, thus providing no incentivefor identification with the organisation from a self-enhancement perspective. Finally,the affiliation with the organisation is visibly limited, through the lack of organisational

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investment in it and the denial of the individual’s personal value to the organisation.The superficial and temporary exposure to the organisation, reinforced by a purelytransactional employment relationship, does not offer much room – or, possibly, desire– for organisational identification on the part of the temporary employee.

This analysis of the effect of ‘lean employment relationships’ on employee attitudestowards the organisation raises our interest in the possibilities of managing theidentification process for temporary employees. Hypothetically, their work identity candevelop in three directions. It can be positively affected by organisational membership,in which case the employee feels drawn towards the organisation; it can have a verylimited effect; or it can have a negative effect, in which case the employee will develophis/her work identity in spite of being a part of the organisation, possibly evencontrasting it to the organisational identity.

Diversity management

An indication of the various ways in which organisations can influence the relationshipwith their temporary employees can be found in the literature on diversitymanagement. Organisations differ in the amount and type of attention they pay tomanaging issues of diversity and in the way in which they incorporate diversitymanagement into the HR function (Dass and Parker, 1999). Recently, Brickson (2000)developed a framework for understanding the effect of different organisationalarrangements on the mutual attitudes of majorities and minorities in organisations. Fortemporary factory workers, the majority/minority distinction easily translates to thatbetween permanent and temporary employees. Brickson distinguishes three types oforganisational arrangements, each driven by (and subsequently reinforcing) a salientidentity orientation. They lead to different interaction patterns between majorities andminorities. A translation of Brickson’s distinction to the relationship betweenpermanent and temporary employees is presented in Table 2.

The collective identity orientation produces and reinforces an organisationalstructure with strong group divisions. It reinforces easy stereotyping and a cleardistinction between ‘good and valuable’ organisation members and different(dispensable) others, such as temporary employees. Such workers are seen as‘undifferentiated prototypes’; their treatment will be opportunistic and hostile. In thiskind of context, Brickson argues, minority members see themselves as peripheral to theorganisation and under threat. They typically experience low self-esteem, areunsatisfied with work and experience low organisational commitment. In theirbehaviour, the minority employees will confirm stereotypes, deliver low-quality taskperformance, interact minimally with co-workers and are likely to leave. The personalidentity orientation produces and reinforces an atomised organisational structure,accepting without prejudice, but not really paying attention to, different others. Work isorganised around individuals, there is little co-operation and everybody is consideredresponsible for his or her own contribution to organisational performance. The generalattitude towards minorities is ambivalent. Behaviour is situation-dependent and drivenby self-interest. Consequently, minority members perceive themselves as marginallyintegrated into the organisation, lacking others’ understanding and support. They feelambivalent towards the organisation and their co-workers, and their behaviour issituation-dependent and variable. The relational identity orientation produces andreinforces an organisational structure with dense and integrated relationship networks.The organisational context promotes interpersonal co-operation, an ‘other oriented’motivational state, and reinforces attentive management of relationships (Brickson,2000: 92). Minority group members are seen as unique individuals, and majority

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members explore the possible value of co-operation. Minority individuals perceivethemselves as integrated and valued organisational members. In this context,minorities will deliver high-quality task performance, disconfirm stereotypes, seek ahigh frequency and quality in their interaction with co-workers, and tend to stay withthe organisation for a long time.

OPERATIONAL MANAGEMENT OF THE TEMPORARY WORKFORCE

The previous discussion shows that after making the strategic choice to operate with adifferentiated workforce, organisations still have to choose operational structures andsystems to manage the flexible workforce. Accepting the previous line of reasoning, itseems that there is much to be gained by careful management of temporary employees.We see three different approaches to the operational HR management of theorganisation’s temporary workforce, summarised in Table 3.

First, the organisation can make a clear distinction between temporary andpermanent employees, emphasising its relationship and responsibility towards its owncore workforce, treating temporary employees as expendable. With the expendableapproach, HR attention to the temporary employees is extremely limited. Companyneeds define the employment relationship. Temporary employees are treated as anundifferentiated commodity. Selection at the gate is not required: contracting is aimedat containing uncertainties and standardising the quality expectations of the inflow atthe lowest level of expectation with strict and narrow task descriptions. Training islimited to a minimum, and socialisation is deemed superfluous. Consequently, controlis based on the unequivocal expectations laid out in the employment contract,



Organisation’s Attitude towards Attitude of Temporary agency identity temporary agency temporary agency worker behaviourorientation workers workers

Collective Stereotyping, Low self-esteem, Confirm stereotypes,prejudiced, unsatisfied with low-quality taskopportunistic, work, low organisational performance, minimalshort-term focus commitment interaction with

organisation, likelyto leave organisation

Personal Accepting but Shaped by Situation dependent indifferent, accidental situations, and variableopportunistic, ambivalent towards uninterested organisation

Relational Curious, Positive self-esteem, High-quality task investigating, comfort, trust, performance, disconfirming sense of person- disconfirm stereotypes, stereotypes, organisation fit seeking interaction seeking to with co-workers, optimise long organisational performance tenure

Adapted from: Brickson (2000)

TABLE 2 Attitudes under different organisational identity orientations

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emphasising (measurable) performance control and purely operational communicationand feedback.

Secondly, the organisation can make no distinction between the operationalmanagement of the flexible and the permanent workforce, leaving the process ofadaptation largely to the flexible employee. Company needs still define the employmentrelationship. Some selection at the gate becomes necessary, as job descriptions have notbeen adapted to cope with the wide variety in staff qualifications that would result fromrandom hiring. Training and socialisation will be limited. Training will resemble basictraining for permanent staff, securing minimal effective task performance. Socialisationwill be accidental. Control and feedback come from the management control systemsthat have been developed for the permanent staff in the organisation.

Thirdly, the organisation can pay special attention to the temporary employees,recognising both their specific needs and their specific possibilities for the organisation.This is reflected in the process of selection and contracting and in specific taskdescriptions for temporary employees. Training and socialisation are also tailored tothis group with their non-standard expectations of both their own contribution to, andtheir expectations from, the organisation. Control and support for these employeesreflect the special arrangements made in contracting and task design, leading to aqualitatively different employment relationship from that of ‘normal’ permanent staff.

Operational management approach Examples of related organisational and HR practices

Expendable Selection and contractingCompany needs define No selection at the gate, simple short-termemployment relationship transactional contracting, strict and narrow

task descriptionTraining/socialisationNarrow training, no socialisationControl and supportOnly performance control and operational communication

No distinction Selection and contractingCompany needs define Some selection at the gate, simple short-termemployment relationship transactional contracting, standard task description,

normal benefits, selection of new permanent employees on basis of performanceTraining/socialisationNarrow training, accidental socialisationControl and supportOnly control, ‘normal’ communication and feedback

Special attention Selection and contractingWorker and company needs Serious selection, extensive specific contracting, are matched in tailored benefits, tailored task descriptionemployment relationship Training/socialisation

Extensive training, special (dedicated) socialisationControl and supportControl and support tailored to specific employment relationship‘Focused’ communication and feedback

TABLE 3 Approaches to operational management of an organisation’s flexible workforce

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CASE STUDIES

To illustrate the variation in operational management of temporary employees andwork behaviour of temporary staff, we compare the HRM practices in the groceriesdepartments of two distribution centres (DCs) – DC1 and DC2 – of a large Dutch retailorganisation. The two case studies are part of a broader investigation of temporarystaffing in four DCs belonging to this retailer. The two cases were selected because ofthe remarkable difference in their objective performances on a number of typicalflexible staffing issues such as turnover of temporary agency workers, sick leavepercentages and number of ‘no shows’ during shifts. The DCs not covered in thisarticle resemble DC1. We interviewed site managers, HR managers, productionmanagers, planners and one team leader at every DC. We also spoke to the sitemanagers of the largest in-house temporary work agency in each. In all cases,interviews lasted between one-and-a-half and two hours. The same 28-page structuredinterview protocol was used in all interviews. The interview protocol sought to analyseseveral topics pertaining to the use of flexible employees, including the specific HRapproach to managing the workforce. Because of the broader research, many moretopics were covered as well, providing us with a thorough understanding of theoperation and management at each site.

Work in the distribution centres

Total employment at each DC is about 1,100 people, mostly in production. Each DChandles the storage and shipping of all fresh foods and groceries for around 170 stores.The DCs are fully comparable in size, performance targets, production system, logisticsplan, labour quality, labour relations, remuneration and pay. All of these have beenspecified by the company’s head office. Labour issues have been fully harmonised by alegally binding, company-wide collective agreement, concluded with the main unions.The operational work in the DCs is unskilled, monotonous and simple. The tasksperformed by employees and TAWs are largely the same. The main task is ‘orderpicking’: workers drive electric trucks through warehouse stock rows, ‘pick’ therequired orders (referred to as ‘packages’: a package is one specified quantity ofproduct) from stock, and stack them on rolling containers. They then place thesecontainers at prescribed docking stations to be loaded into the lorries that supply theretail shops. This task can be learnt in four evenings, although it takes about fourweeks for new recruits to pick 1,000 packages per shift, the required productionperformance standard. The DCs’ groceries departments measure roughly 24,000 squaremetres and handle about 600,000 packages a week. The DCs work in a three-shiftsystem, six days and six nights a week.

The retail company uses a ‘just-in-time’ logistics concept. Retail stores order eachday before a certain time and are guaranteed delivery the next day in pre-allotted timeslots. This results in highly volatile production patterns. In order to handle thesefluctuations, each DC uses large numbers of TAWs, 36 per cent in DC1’s groceriesdepartment and 46 per cent in that of DC2. TAWs generally have lower hourly wages,because of their lower average age (EUR22 per hour versus EUR17 for temps).Furthermore, TAWs are not bound by many of the working time restrictions that havebeen laid down in the collective agreement for company staff, and work only whenwork is available. Given the highly volatile production volumes, this is very importantfor overall labour cost reduction. Temps work mainly during ‘difficult’ shifts – duringthe night, at weekends and in holiday periods.



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Similarities and differences

The use of temporary employees in the two DCs reflects management’s evaluation ofthese jobs as generic (skills readily available in the labour market) and of limitedstrategic value to the organisation. In Lepak and Snell’s strategic analysis of HR sourcingstrategies, the preferred employment mode for these employees would be (temporary)contracting, resulting in a transactional employment relationship with limited mutualresponsibilities, relying on an HR configuration built to coerce compliance (Lepak andSnell, 1999). This would lead us to expect similar simple HR configurations in both DCs,with tight organisational controls leading to comparable performance of the temporarystaff. But the two distribution centres show major differences in all respects. We firstdescribe the two DCs, detailing staff characteristics, operational HR outcomes andoperational management of temporary workers. Subsequently, we will use the analyticframework developed above to explain the differences.

Distribution centre 1 DC1 distinguishes three categories of workers: (1) companyworkers, working under a full-time or part-time contract that can be either open endedor of limited duration; (2) TAWs on half- or full-year secondment contracts with thetemporary work agency (called ‘coupled flexers’); and (3) regular TAWs provided bythe in-house TWA (called ‘flexers’). If flexers are available for shift work and produceup to quantity and quality performance standard, they can be ‘coupled’ to a specificcompany team (consisting of company employees). They then work the same shifts asthe team, which effectively ends their flexible deployment. After one year, they eitherget a permanent company contract or their contract is terminated.

In the groceries department, 184 people work full time on a permanent or limited-duration company contract. One hundred and four work part time – this group includesthe coupled flexers. Part-timers work an average of 10 hours a week: 98 per cent of theseemployees are male, and 58 per cent are foreign nationals. Flexers make up 36 per cent ofthe workforce. Again, 98 per cent are male, and about 65 per cent are foreign nationals.They are not ‘coupled’ to a specific team and work only when work is available.

In DC1, the flexers have a very bad name. Management and company personnelalike see them as a problem group that hinders performance and disrupts theproduction process. The illness rate is 12 per cent. The average tenure of people in thisgroup over 2001 was only six weeks. Annually, about 1500 people are recruited for thispool: 40 per cent of them leave the job within two days and 75 per cent have to leavewithin three weeks. This is a serious problem, as it takes four weeks before peopleproduce up to standard. The reasons for this high percentage of turnover are partlyknown – ‘wrong attitude’ (27 per cent), ‘no shows’ ie absent without notification (25 percent), ‘better job’ (8 per cent), ‘doesn’t like work’ (7 per cent), ‘illness’ (3 per cent).

A tight local labour market is considered to be part of the problem for DC1. Becauseof this and the negative labour market image of the work in this distribution centre,virtually “anyone with two hands”, as one of our respondents put it, is sent to the DC.The inflow of TAWs is coordinated by an in-house agency, staffed by two young, well-educated recruiting officers who have limited experience with the work in the DC. Therecruiting officers have strict performance targets, based on the number of people theybring into the organisation. Because of the high turnover, DC1 has decreed that the firsttraining day for new TAWs will not be paid and has set strict performance criteria.Once new agency workers start their training, they enter a 40,000 square metre buildingwith roughly 75 new ‘colleagues’ per shift and only a minimum of introduction. Afterfour evenings of training on the job, the new recruits are on their own and work indifferent teams and different hours all the time, hence not getting to know any of their

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new co-workers. In fact, team leaders explicitly stated that they themselves do not feelresponsible for the flexers and see them as the responsibility of the agency staff. Agencystaff are available during office hours only, though they will show up at the beginningof each shift to check that their people have turned up. Permanent employees do notregard flexers as true co-workers for the first six weeks. The standard joke when thenew TAWs are introduced is to tell them not to give their name until they have workedfor six weeks, since it would probably be a waste of time to do so. “If you are 18 yearsold, not well educated, starting out in your first job ever, you will feel completely lost,”as the manager of the in-house TWA in DC2 put it. TAWs who perform up to standard(ie 1000 packages per shift) are offered a ‘coupled’ status with a half-year or full-yearsecondment contract. This is seen by the company as a good strategy to show and getcommitment. However, a side-effect is that those who are not offered such status withinthe first four weeks – and thus remain uncoupled flexers – must feel their performanceis bad and that their prospects are limited, as indeed they are.

Distribution centre 2 DC2 distinguishes two categories of workers: (1) companyworkers who operate under full-time or part-time contracts, open ended or for alimited duration; and (2) temporary workers who have a contract with one maininhouse TWA. Within a company staff of 496 full-time and 112 part-time permanentand limited-duration contracts in DC2, we found 498 TAWs providing 23 per cent ofthe DC’s productive capacity and 46 per cent of the capacity in groceries. Full-timecompany employees work a 40-hour shift system. Approximately half of the part-timers work eight hours, and the others work 20 hours a week. DC2 has fewer than 2per cent women on its own staff. About 35 per cent of the employees are foreignnationals. The in-house TWA has differentiated its workforce: 150 full-timers work 40hours a week in shifts, and 75 ‘blockers’ work in ‘blocks’ of about four hours (never fullshifts). Blockers are mostly women; their working days are scheduled around care fortheir children. Forty Polish nationals work on annual contracts, six weeks on, twoweeks off. Eighteen Belgians, operating under Belgian labour law, work night shiftsonly. Together, these 283 workers form a stable core group. The other 215 are regulartemps – for example, university and high school students, people who attend so-called‘work and learn‘ programmes. Twenty per cent of the TWA workers are female, andabout 30 per cent are foreign nationals.

In DC2 there were no negative comments about temporary workers by ourrespondents. There was some worry on the part of management that they were nottreated equally compared with company staff. Indeed, the temporary workers tendedto work all the ‘difficult’ hours. In groceries the average sickness rate for companyworkers is 13.4 per cent, but for agency workers less than 3 per cent. For DC2’s TAWs,the average tenure is more than a year, and there are hardly ever ‘no shows’.

DC2 works with one dedicated in-house TWA with a permanent staff of 18 people(full-timers and part-timers). All new recruits are interviewed on site by an experiencedrecruiter, who previously worked at DC2 in all floor jobs and as a co-ordinator fortemps herself. After selection, the recruiter always welcomes ‘her’ workers at the firsttraining evening and formally introduces them to their trainers and their DC2 team-leaders (DC2 has appointed two dedicated company team leaders for temps). Afterfour evenings of training and a test, the new recruits are congratulated by the sitemanager of the in-house TWA himself and welcomed as workers of the TWA (explicitlynot of DC2!). The manager gives a presentation on what workers can expect of theTWA and what he expects from them. The TWA has eight full-time co-ordinators on thework floor in DC2. For four weeks after completion of the basic training, every new



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worker is assigned to one of them. The co-ordinators guide and support ‘their’ people,but also appraise and select them. They work the same shifts as their workers. The co-ordinators visit every new worker several times per shift, have a formal talk with themevery week, and fill out a simple form on progress and points of attention together witheach TAW. In the fourth week the co-ordinator schedules a formal appraisal interviewwith the worker and his company team leader and then writes a recommendation onwhether to accept the new TAW. If accepted, the new recruit becomes a full member ofthe TWA workforce in DC2. After that, the co-ordinator still stays in touch every day,jointly deciding on weekly work schedules, planning holidays and visits to the doctorand having formal appraisal talks with the DC2 company team-leaders every half-year.

Apart from the group of 150 full-time TAWs, most agency workers want to haveflexible working hours. By differentiating its workforce, the agency provides choice inwork patterns to fit the needs of the different categories of workers it employs.However, once a deal is concluded, people are expected to honour it. If people say theywant to work Saturdays only, and a deal is made, the TWA guarantees work everySaturday for the whole period agreed. The worker then must show up every Saturday.For the blockers and the 215 regular TAWs, however, the co-ordinator will meet eachindividual every week to negotiate the next week’s working time arrangements. Thissystem enables workers to plan their work around their other obligations. The TWA canoffer this flexibility to its workers and at the same time satisfy DC2’s flexibility needs,because it employs almost 500 people and operates in all DC2’s departments. TheTWA’s management style combines flexibility with strict adherence to agreements. Forexample, the TWA’s site manager does not allow ‘no shows’. Once ‘a deal’ is made andpeople do not show up, he will personally check the arrangements made. In case ofunjustified absenteeism, the worker will be fired immediately.

Operational HR management of the temporary workforce

The two DCs seem to represent the opposite ends of the spectrum of operational HRapproaches sketched above. In this section we summarise our findings by confrontingour expectations for the ‘expendable’ and ‘special attention’ approaches with the actualfindings in DC1 and DC2 respectively. Table 4 summarises the two operational HRapproaches with related HR practices. In DC1, company needs clearly define theemployment relationship. Contracting is simple – mutually without expectations.Within the first two weeks, good-quality employees are selected from the temp pool,leaving behind those employees without a future in the company. Consequently, anyinvestment in these employees seems a waste of money. This results in narrow training,a lack of socialisation and purely operational control and communication. In DC2, thein-house TWA attempts to match worker and company needs through a seriousselection and contracting process that focuses on establishing a clear and unambiguousemployment relationship between the organisation (ie the in-house TWA) and thetemporary employee. This approach recognises the needs of those choosing an atypicalemployment relationship, because of relatively enduring individual preferences (egFeldman et al, 1994). Focused training and socialisation, strict control and clear supportduring employment create a situation where temporary employees are treateddifferently (not better or worse!) from the company’s permanent employees.

The two cases also show a very different way of accommodating the operational HRmanagement for flexible staff in the organisation. DC1 essentially ignores the issue,making no structural provisions to cope with the temporary workforce. It has left thetraining and management of the temporary employees to line management and regularcompany employees. DC2 has outsourced the operational management of its

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temporary workforce to the TWA. This TWA employs 18 people who work toaccommodate the needs of the different groups of flexible employees in accordancewith their preferences. At the same time, social control and supervision within theTWA are firm. While this may lead to heightened work pressure for TAWs in arelatively precarious employment relationship (Allen and Henry, 1996; Beck 2000), thecareful contracting and strict control are part and parcel of a social community wherethe temporary employees are treated as full members and not as irrelevant orexpendable resources.

The differences between DC1 and DC2 reflect two very different strategies fororganising the management of their temporary workforce. Dass and Parker (1999)identify two important dimensions for distinguishing strategies for managing HRdiversity: proactiveness (ie explicit recognition of need for diversity management) andthe extent to which diversity management is integrated in the operational HRmanagement of the organisation. DC1 seems to ignore the fact that the utilisation oftemporary employees increases the diversity of the workforce. It appears to cope withthe effects of this neglect with a purely reactive strategy increasing recruiting andreducing training in the organisation. The approach of the management of DC2 seemsmore proactive. By introducing the role of the dedicated in-house TWA it has created afreestanding HR function (Dass and Parker, 1999: 74) devoted to the management ofemployees with an atypical employment relationship.



Operational management Examples of related organisation and HR practicesapproach

DC1: Expendable Selection and contractingCompany needs define No selection at the gate, simple contracting, no benefits, employment relationship strict and narrow task description

Permanent contract possibilities are exception Selection of new permanent employees from temp poolTraining/socialisationNarrow trainingNo socialisationControl and supportOnly controlOnly operational communication

DC2: Special attention Selection and contractingSerious selection, extensive specific contracting, tailoredbenefits, tailored task description, conditional but clear opportunities for permanent contractsTraining/socialisationExtensive trainingSpecial (dedicated) socialisationControl and supportStrict control and support as specified in contract‘Focused’ communication and feedbackWorker and company needs are being matched

TABLE 4 Approaches to operational management of temporary employees in DC1 and DC2

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Perceptions of the employment relationship

Differences in the behaviour of temporary employees in DC1 and DC2 may beexplained by different perceptions of the employment relationship induced by thecontrasting operational HR approaches. The uninvolved and opportunisticmanagement of the temporary workforce in DC1 supports the classic short-term,transactional employment relationship for temporary factory workers. The approach inDC2, however, clearly aims to communicate the importance of responsible taskbehaviour to the temporary employees and reciprocates this expectation with carefulattention to the individuals’ needs. This explicit attention to employees’ individualneeds and obligations increases tangibility and volition of the employment relationshipfor the employee. The possibility of a long-term relationship with DC2 (through theagency) affects the time frame of the relationship (longer term, less precise). Attentionto training and support in the work is likely to increase the employees’ perceptions ofparticularism and provide an increased socio-emotional bonding. These differences inemployee attitudes would predict stronger commitment to the organisation. Thisprediction seems to be supported by the relatively low levels of sick leave, low turnoverand few ‘no shows’ on shifts in DC2.

Identification process and employee attitudes

A similar evaluation of the possible effects of the different HR approaches on thetemporary employees’ identification with the DCs provides a further explanation of thedifferences in employee behaviour in DC1 and DC2. Table 5 reviews all factorsinfluencing the identification process that were discussed above.

DC1 pays no attention to the socialisation of temporary employees, thus the viewthat such workers hold of the organisation is likely to be influenced by salient, butrandom, events in their experience with the organisation. Furthermore, DC1 clearlydistinguishes between permanent and temporary staff, thus actively discouraging thetemps’ identification with the organisation. The active recruitment policy of liftingeverybody ‘worthwhile’ out of the temp pool within the first two weeks ofemployment further reduces the attractiveness of being a temporary employee in DC1:the pool is for everybody who is not fit to work there. Consequently, being a temporaryemployee in DC1 offers no incentive for identification with the organisation from theperspective of self-continuity, self-distinctiveness or self-enhancement. Intensity andduration of employment as a temp are by default short, and temps are visibly notaffiliated with the organisation.

DC2 provides a very different context for the temps. Socialisation is explicit andfocused on the temps. By paying attention to training and socialisation, the organisationshows that it values the possible contribution that the temporary employees can make.The long-term perspective that is offered to temps indicates that the organisation feelsthat employees with atypical employment wishes have something to offer that matchesspecific organisational needs. The active management control and operational supportof the temporary employees in their daily work increase the visibility of the employees’affiliation with the organisation. DC2’s active and focused socialisation and the effort tooptimise employee-job fit offers a clear incentive for identification with the organisationfrom the perspective of self-continuity, self-distinctiveness and self-enhancement.Temporary employees have limited choice regarding the intensity and duration ofemployment, and are visibly affiliated with the organisation. Consequently, temporaryemployees in DC2 get ample opportunity to identify with their employer (the TWA),but also with DC2, as the TWA works exclusively for DC2.

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CONCLUSION

We have argued that the differentiation of employment modes, advocated in thestrategic HRM literature, leading to the differentiation between core employees andvarious kinds of peripheral employees, may be useful in determining the strategicHRM architecture (Lepak and Snell, 1999). However, it should not be translated into apurely quantitative redistribution of HR attention between different groups ofemployees, resulting in careless operational management of employees who have beencontracted in a transactional employment mode. Our case analyses show that carefuloperational management of temporary employees may reduce the incidence of anumber of flexible staffing problems that occur.

The impact of careless management of employees with more transactionalemployment relationships is an important issue, because it affects the operationalmanagement of a growing number of employees in modern organisations (Guest,1998). When employment is traded as a commodity, the traditional social aspect of theemployment relationship fades away, possibly eroding valuable aspects of operationalHRM. It seems crucial for the successful development of modern HR practice tounderstand the effects of the resulting socially thin employment relationships onemployees’ psychological contract and their identification with the employingorganisation. Furthermore, it is important to understand how the operationalmanagement of temporary employees may be improved within the confines of the HRstrategy chosen by the hiring organisation.

Theory about the employment relationship, identification with the organisation anddiversity management proved helpful in understanding the effects of operational HRM



Factors influencing DC1 DC2attractiveness ofmember identification

Socialisation Limited ExtensiveSelf-continuity Jobs pictured as Effort to optimise person-job fit,

unimportant, temps by choicetemps out of necessity

Self-distinctiveness Clearly not member Temporary employees are unique of organisation members of organisation

Self-enhancement Temporary employees Specific, valuable contribution to ‘are dispensable’ the organisation

Intensity Simple job execution More responsible work, personalengagement recognised

Duration Short-term appointments, Long-term possibilities for no perspective as temps ‘temps by choice’

Factor amplifyingeffect of attractivenesson memberidentification

Visibility of affiliation Clearly not members of Careful socialisation and ‘normal’ organisation training, people receive support

and get feedback, explicit special relationship

TABLE 5 Factors influencing identification with the organisation in DC1 and DC2

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on the work behaviour of temporary employees. Our two case studies (DC1 and DC2)illustrate the effects of two of the three operational HR approaches that we describe. DC1reflects the ‘expendable’ mode, with a narrowly defined, transactional employmentrelationship, firmly based on calculation and on the expendability of temporaryemployees, resulting in weak HR performance for the temporary employees. In DC2 wesee ‘special attention’ in selection, in training and support, and even in evaluation andappraisal. There is a special role for the in-house TWA that works exclusively for DC2.Considering different strategies for managing HR diversity (Dass and Parker, 1999), ourfindings indicate the difficulty of finding a systemic solution for managing employees inatypical jobs. DC2 management has coped with this by creating a freestanding HRfunction dedicated to the management of employees with an atypical employmentrelationship with DC2. The results are a tenure of more than one year on average, only a3 per cent sickness rate and hardly any ‘no shows’.

The special attention approach, however, does need a word of caution. All HRprocedures established by DC2 aim to reduce the behavioural problems oftenencountered in working with a temporary workforce in a contracting mode ofemployment. ‘Special attention’ therefore does not offset the precarious nature of thetemporary employment relationship. The increasing economic pressures of the pastyears and the changing balance in the labour market have shown the relativevulnerability of the temporary workforce and a rapid resurgence of labour cost andshort-term flexibility arguments in the demand for TAWs. However, this word ofcaution aside, we feel that the ‘special attention’ approach indicates significant scopefor improvement over the careless laissez-faire approach to operational HR managementthat too often accompanies the strategic choice for working with temporary employees.

Acknowledgements

The authors gratefully acknowledge the support of SALTSA and the European Union(Fifth Framework Improving the Targeted Socio-economic Research Programme) fortheir support of this research.

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Managing temporary workers: work identity, diversity and operational HR choices